NamPower to import electricity worth N$2,6 billion

28 Apr 2015 18:30pm
WINDHOEK, 28 APR (NAMPA) - Namibia will this year alone import electricity worth N.dollars 2,6 billion.
The cost will increase to over N.dollars 12 billion over the next four years, said NamPower Managing Director Paulinus Shilamba on Tuesday during the two-day Blue Economy conference in Windhoek.
The conference is being held under the theme ‘Sustainability for Poverty Reduction’.
Namibia imports up to 80 per cent of its electricity from neighbouring countries during the dry season.
“We want to develop our own power stations in the country as a main source of supply and use imports to fill gaps only,” Shilamba said.
He explained that importing electricity is expensive and there are challenges associated with more regional import contracts.
Regional transmission bottlenecks, especially in South Africa and Zambia, are among the challenges Namibia faces during the importing of power from those countries.
“Another challenge includes interruptible and unreliable power supply from the region,” the NamPower MD indicated.
He said termination of most of the existing import contracts due to regional utilities experiencing domestic challenges makes new import agreements difficult to secure and expensive.
The first agreement, which expired late last year, was with the Zimbabwe Electricity Supply Authority (ZESA) for 150 megawatts (MW), followed by NamPower's supplementary Eskom agreement, which expires in April 2015 (200MW).
Other agreements nearing their expiry date are with the world's largest temporary power generation company, Mozambique's Aggreko, which lapses in August 2015 (115MW), and an off-peak agreement with South Africa’s Eskom that expires in April 2016 (300MW).
Shilamba said the supply situation in Namibia will remain challenging at least until the commissioning of the Kudu base-load power plant in 2018.
He noted that serious power supply challenges will be experienced if the proposed solutions, especially the 250MW gas-to-power project in the Erongo Region, are not implemented on time.
Shilamba stated that the most critical period will be after August 2016, when enormous strain will be placed on the system and when an additional generation capacity of at least 250MW will be needed to ensure security of supply for the country.
He indicated that the procurement of the 250MW gas-to-power project is critical for the national economy.
“The commissioning of this plant will give us the breathing space and confidence to overcome the challenges and difficulties prior to the commissioning of the Kudu Gas-to-Power station in 2018,” he stated.
The Erongo plant will operate in the minimum level of demand before Kudu and in mid-merit mode post-Kudu.
Currently, Namibia does not have a proper peaking plant in its power supply mix, apart from the small 22,5MW Anixas power station at the coast which has become inadequate, Shilamba explained.
The 250MW plant will also run as a proper peaking plant when required and be readily available when the Kudu, Van Eck or Ruacana power stations are out of service for maintenance, planned or forced outages in the future.